SINGAPORE May 7 The U.S. 10-year Treasury yield
slipped on Tuesday, edging away from a three-week high set the
previous day, when bonds extended their losses in the wake of
last week's better-than-expected jobs data.
* The near-term focus is on this week's bond auctions. The
Treasury will sell $32 billion in three-year notes on Tuesday,
$24 billion in 10-year notes on Wednesday and $16 billion in
30-year bonds on Thursday.
* Ten-year notes rose 4/32 in price to yield roughly 1.750
percent. The 10-year yield eased 1 basis point from
late U.S. trade and inched away from a three-week high of 1.776
percent set on Monday.
* The better-than-expected jobs data on Friday had caught
traders off guard, as most were anticipating a gloomier jobs
picture after other economic data pointed toward more sluggish
* Many analysts, however, believe that economic growth is
still too slow and investors have pared back expectations that
the Federal Reserve may taper or end bond purchases this year as
inflation also slows.
A Reuters survey of economists, taken after Friday's jobs
data, showed that 11 U.S. primary dealers - financial
institutions that deal directly with the Fed - expect the U.S.
central bank to continue asset purchases into 2014, while just
four saw the programme ending this year.
* The 10-year Treasury yield might decline after this week's
bond auctions are out of the way, said Shinichiro Kadota, a
strategist for Barclays in Tokyo.
Kadota said the U.S. economy seems likely to slow down in
the April-June quarter due to factors such as the impact from
the government spending cuts known as the sequester.
"Once the market gets past the auctions, bonds yields might
head lower again, since the chances seem high that data will
point to a worsening of economic conditions," Kadota said.